Nesco Limited has been slapped with a Rs 5 lakh penalty by the Securities and Exchange Board of India (SEBI) over multiple violations related to the continued tenure of its Independent Director Manu M Parpia even after his term had expired. The penalty, which includes Rs 2 lakh under Section 15A(b) and Rs 3 lakh under Section 15HB of the SEBI Act, was detailed in SEBI’s final order issued on April 15, 2025.
According to the regulator, Nesco failed to comply with several key provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, including Regulation 25(2), 27(2), 17(1C), and 16(1)(b)(iv). The violations pertained to continued classification of Parpia as an Independent Director post his term expiry, failure to secure timely shareholder approval for appointment of new directors, and delay in disclosing postal ballot notices.
SEBI noted that the company failed to maintain proper governance and misrepresented director status in its regulatory filings for over a year. It further observed that Mr. Parpia continued attending board and audit meetings during this period and received professional fees, which SEBI argued compromised his independence.
While the company admitted the oversight and has implemented corrective measures, SEBI stated the breach was not merely technical but indicative of weak compliance processes. However, the company in its regulatory filing clarified that the financial and operational impact of the SEBI penalty is “not material.”
The final order directs Nesco to strengthen its compliance systems and mandates payment of the penalty within 45 days.
Disclaimer: The information above is based on official regulatory documents. This article is for informational purposes only and should not be construed as financial or legal advice.